According to the latest mid-year report from the RIAA (Recording Industry Association of America), the U.S. music industry experienced robust growth in the first half of 2023. Total revenues reached $8.4 billion, a 9.3% increase compared to the same period last year. At wholesale value, revenues grew 8.3% to $5.3 billion.
The report highlights that paid streaming subscriptions played a major role in driving revenue growth, with an increase of over $550 million, bringing the total number of subscriptions to around 96 million during the period. Streaming revenue accounted for 84% of total recorded music revenues in the U.S., reaching $7.0 billion, a growth of 10.3%. This marks the fourth consecutive year that streaming has accounted for 83-84% of total revenue.
While vinyl revenue only grew 1% (compared to 22% growth last year), physical formats as a whole reached their highest level since the first half of 2013. Total physical revenues were $882 million, a 5% increase year over year, with vinyl accounting for 72% of physical format revenues. Vinyl albums outsold CDs for the third year in a row, with 23 million units sold compared to 15 million CDs.
Paid subscription services contributed significantly to the overall revenue growth, totaling $5.5 billion, an 11% increase. Streaming subscription services made up over 75% of streaming revenues and nearly two-thirds of total revenues.
However, the growth rate of paid subscriptions to on-demand music services is slowing down. The first half of 2023 saw an average of 95.8 million subscriptions, compared to 90 million in the same period last year.
Revenue from music streaming services based on advertisements grew at a slower rate, with on-demand services seeing only a 1% increase to $870 million. Digital and customized radio music revenues experienced a 16% growth to $657 million, including SoundExchange distributions and payments from services like SiriusXM.
On the other hand, revenue from digital downloads continued to decline. Digital album sales dropped 12% to $107 million, while individual track sales decreased 14% to $97 million. Digital downloads accounted for only 3% of recorded-music revenues in the first half of 2023.
Overall, the U.S. music industry is thriving, primarily driven paid streaming subscriptions. While vinyl continues to maintain a strong presence, the digital era is undoubtedly shaping the future of the industry.
– RIAA’s latest mid-year report